A) 3. Your case company needs to borrow funds and has several options available to it, Loans A, B and C. The interest rates (APR) for these options are given in Table 1. What is the EAR of the loan option the company should choose? Stated annual rate (r) 4.26% No. of compounding periods per year (m) 2 4.31% EAR B) Stated annual rate (r) 4.25% No. of compounding periods per year (m) 4 EAR 4.32% c) Stated annual rate (r) No. of compounding periods per year (m) EAR 4.24% 365 4.33% The EAR to be chosen is A = 4.31 % in order to borrow funds because option A has the lowest effective annual rate.